San Ramon Council reviews $85.3M preliminary budget, staff warns Measure N remains critical

San Ramon — City finance staff presented a preliminary FY 2026–27 budget on May 12 that projects $85.3 million in total revenue but shows the city remains dependent on Measure N to avoid a structural deficit.

"The total projected balanced revenue for fiscal year 26‑27 is projected to be $85,300,000," Budget Manager Yulia Elbow told the council during a 40‑minute overview of general fund revenues, expenditures and the capital program. She said property and sales taxes together account for about 67% of general fund revenue and that projected operating expenditures outpace ongoing revenue growth.

The presentation and council discussion focused on three near‑term pressures: ongoing expenditure growth, the fragility of sales and property tax receipts, and limited options to add large new revenue sources given local land‑use constraints. "We are relying more heavily on Measure N this year than we did in fiscal year 26," Jennifer (finance lead) said, adding that staff reduced projected expenditure growth from a historical 9% to 6.6% but that the city still faces a long‑term gap as Measure N sunsets.

Why it matters: without policy changes or a new revenue measure, staff projects the city will need sustained cuts or new revenue to maintain current service levels after Measure N expires. Yulia told the council the general fund shows a negative $6.5 million difference between operating revenues and expenditures before transfers, and a net change in fund balance of negative $13.7 million; with Measure N included the net change becomes a modest positive.

Council members and residents pressed staff on how reserves would be used, whether the city could invest reserves to increase yield, and where additional revenue could come from. Councilmember Adler asked whether the city could dip into reserves in short‑term downturns; staff said reserves are intentionally large but often not designated for recurring operations and that any change would require a reserve‑policy decision by council.

Several councilmembers noted San Ramon’s limited retail footprint and constrained land for large sales‑tax generators. "Where can we place six car dealerships in San Ramon? There just isn't retail land available," City Manager (speaker 9) said, underscoring the difficulty of materially increasing sales‑tax revenues through new big‑box retail.

Public comments reflected similar concerns. Jim Blickenstaff urged caution about relying on more sales tax, calling it “a regressive tax” that can disproportionately affect lower‑income residents. Other speakers asked staff to be more explicit about how the city manages investment income and where potential new revenue streams might be pursued.

Capital program and staffing: staff outlined a $10.2 million CIP for 32 projects in 2026–27, supported principally by gas tax, development impact fees and special funds. The preliminary budget funds one additional FTE in finance as a CIP program manager and shows modest increases for utilities, cybersecurity and ADA‑related software upgrades.

Next steps: staff plans to return with a full budget document on May 26 and a detailed 10‑year fiscal resiliency model in July to support council policy discussions on reserves, pension/OPEB funding and potential revenue measures. "We wanted to remind everyone that at the next council meeting on May 26, we plan to bring the full budget document," Jennifer said.

The council did not vote on the budget tonight; members directed staff to continue work on the resiliency framework and to prepare policy options for reserve use, revenue measures and service‑level tradeoffs.

Ending: With the presentation concluded, councilmembers thanked staff for narrowing expenditure growth and scheduled follow‑up budget work for July and for the May 26 meeting when the full budget document will be issued.